Wasting your time with things I find interesting, amusing, or enraging. Reinke does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations

You’ll never guess: Krugman contradicts himself this week, but only Bob Murphy, who knows Krugman’s columns inside and out, caught him. This week the topic is whether it’s a good idea at some point to repay the national debt at less than face value. Krugman is horrified, so maybe it’s a good idea….

Krugman Column“The Making of an Ignoramus” (May 9, 2016)“Keynesians on Treasury Default: Depends Who’s in the White House,” by Robert P. Murphy“Trump’s Right — Paying Back the National Debt with ‘Discounts’ Is Already Official Policy,” by David Stockman“Repudiating the National Debt,” by Murray N. Rothbard

Related EpisodeEp. 33 Krugman and Hamilton Sitting in a Tree

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Key takeaway:

If the Fed does meet its target inflation rate of 2%, then arithmetically over thirty years your dollar’s purchasing power is down 53%.

It’s a silent theft of your wealth.

Good luck saving with that scenario. Back to the analogy — what do you want find a pirates chest full of: US “dollars”, Confederate dollars, or gold coins?

Shebab…the wicked Ruskis in Ukraine…those Yemeni Houthis…Iran…Sudan…Islamists in Libya and Mali…Boko Haram in Nigeria… the Red Chinese in Asia. Oh yes, and defend Latvia and fight the Lord’s Army in Uganda.

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To quote Frederick the Great, “he who defends everything, defends nothing.” To which we may add, he who spends on wars everywhere, ends up broke. And he who ignores domestic needs for the sake of imperial glory abroad is cruising for a bruising.

The American Imperium can no longer enforce the international status quo that had given it immense power and wealth since 1945. The Hapsburg Emperor Charles V and poor Louis XVI faced the same problem.

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As they say at the Betty Ford Clinic for drug and alcohol addicts, “just say no.” Or, if Americans really want more jolly little wars around the globe, then raise taxes to pay for them instead of hiding their cost in the national debt.

Americans now face two conflicts in places they can’t even find on the map.

*** end quote ***

From the movie WarGames (1983): “A strange game. The only winning move is not to play. How about a nice game of chess?”

Maybe BHO44 was displaying a flash of unexpected brilliance when he blurted out “ … we don’t have a strategy …”?

At some point, “We, The Sheeple” must wake up and take charge of our Gooferment!

The Federal Reserve has kept interest rates near zero since 2008, but the economic boost comes at the expense of these savers.

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This is basically saying that the time preference for delaying consumption is ZERO!

When folks were planning their retirement decades ago, who would have guessed a zero interest rate scenario? Any financial advisor, who did, would looking for a job. There was always talk of the after tax interest rate minus the rate of inflation. That was figured at anywhere from 5 to 8%.

Yeah, right.

Now the after tax rate is ZERO and the inflation rate is guesstimate at 5%. (Pay no attention to the smoke and mirrors being blown up your <synonym for donkey> by the “news anchors”, the FED, politicians, and bureaucrats. You’ve seen the price of gas, the national debt, the amount of “dollars” being held by the various bailed out banks.)

The reason that the FED is holding the interest rate down is to allow the Gooferment to carry the national debt with ease.

The retirees are only one group that is being hurt.

There’s a long list; not the least of which is anyone considering making a capital investment. What is the true cost of capital? (I know some businesses that are making a 12% assumption. Based on historical averages in previous business plans.)

When Standard & Poor’s reduced the nation’s credit rating from AAA to AA-plus, the United States suffered the first downgrade to its credit rating ever. S&P took this action despite the plan Congress passed this past week to raise the debt limit.

The downgrade, S&P said, “reflects our opinion that the fiscal consolidation plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.”

It’s those medium- and long-term debt problems that also worry economics professor Laurence J. Kotlikoff, who served as a senior economist on President Reagan’s Council of Economic Advisers. He says the national debt, which the U.S. Treasury has accounted at about $14 trillion, is just the tip of the iceberg.

“We have all these unofficial debts that are massive compared to the official debt,” Kotlikoff tells David Greene, guest host of weekends on All Things Considered. “We’re focused just on the official debt, so we’re trying to balance the wrong books.”

Kotlikoff explains that America’s “unofficial” payment obligations — like Social Security, Medicare and Medicaid benefits — jack up the debt figure substantially. Laurence J. Kotlikoff served as a senior economist on President Ronald Reagan’s Council of Economic Advisers and is a professor of economics at Boston University.

“If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That’s the fiscal gap,” he says. “That’s our true indebtedness.”

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It’s simple. The “game” is rigged against the little guy. So why do us “little guys” still allow ourselves to be fooled?

Stupidity!

It’s like the old joke about the accountant keeping two sets of books!

“Plus shipping and handling”. Like the TV offers that are bait ‘n’ switch. The politicians and bureaucrats throw around deficit, debt, and “cuts” that cut nothing.

Time is running short.

What happens when the Chinese and the rest of the world cut us off. Credit card declined!

I didn’t realize what some unknown executives at AT&T and CSFB by making the defined pension plans fully funded separate legal entities. There was no funny business. Pensions were a sacred trust. The money was taken and invested prudently so that now I’ll get my benefit for the rest of my life.

We’ve “cheated” Social Security recipients, and various Federal and State workers. They are going to get <synonym for the past tense of the procreation act> because the contributions have been stolen by past politicians and bureaucrats to buy votes.

Argh!

We need an honest accounting. Just how bad is it? I know in the Pepuls Republik of Nu Jerzee, guvs of both parties have not funded the pensions. That’s just wrong. If a private company did that, the execs would be in jail. Why are the guvs and bureaucrats exempt?

How’s that “change” working out for you?Sunday, February 5th, 2012Posted by Ed Mattson

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These government “number slingers” are the same bunch that tells you the Consumer Price Index increased 3.0 percent before seasonal adjustment to end 2011. Let’s see… 3% inflation. Do you really believe that? Have you been shopping lately? Have you purchased gasoline or diesel for your vehicle so you could go to work (if you still have a job)? Oh, that’s right. THEY DON’T COUNT GAS AND FOOD IN THE INFLATION RATE! I guess we don’t need food or gasoline.

In most families the women do most of the grocery shopping right? Men usually aren’t always up to current grocery store prices. Next time anyone talks about politics and how things are going, just ask them if they have purchased ten pounds of potatoes this past year, or stopped in at a gas station. In 2009, 10 lbs of potatoes cost about $3.50 in Western Michigan (about $3.00 at Wal-Mart). Today the cost is over $5 any place you want to shop. Gas was $1.79/gal when Obama’s entourage slithered into Washington and today, down at the local discount gas station here in North Carolina, it’s $3.59. Is it any wonder they DON’T CALCULATE FOOD AND GAS INTO THE CPI?

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Excellent point. If they did then they’d have to give a COLA to all the old folks.

It’s like the scam with ZERO interest rates by the FED. That keeps Uncle Sam’s 15T$ debt as a near zero expense.

When do “We, The Sheeple” wake up?

When does the World wake up?

You’ll know the scam is over when we have to pay for oil in gold or someone else’s national currency.

John Allison is the former chairman and CEO of BB&T, the nation’s 10th-largest financial holding company. He was named one of the 100 most successful CEOs by the Harvard Business Review and since 2009 has been on the Wake Forest University Schools of Business faculty as Distinguished Professor of Practice.

*** and ***

Q: In the long term, what do you think should be done with the Fed?

A: If I were in charge, I would get rid of the Fed. I believe that as long as the Fed exists, Congress can effectively print money. And it doesn’t matter whether they are Democrats or Republicans, they would rather print money than tax people. They want to spend because that effectively buys votes, and they don’t want to tax people because that loses votes.

I think the Fed provides the temptation for massive government deficits. If the federal government couldn’t print money, it would have to have better financial discipline than it has today.

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Vote Ron Paul.

There’s no other candidate on the horizon that understands or articulates that the FED is the problem.

It gives the duopoly — the D’s and the R’s are two sides of the same coin intended to give “We, The Sheeple” the illusion of a choice — an unlimited checkbook to borrow and spend.

Government is not a jobs program, and government is not your caretaker. Government is an arrangement made by free individuals to protect their rights and their property.

It doesn’t take $3.6 trillion a year to do that effectively in America today. I doubt it takes a trillion. We must swallow the bitter pill of austerity now, on our own terms, while we are still the undisputed leader of the free world and while we still have a Constitution, so that we can restore our prosperity in a way consistent with personal liberty.

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Certainly seems that the 15T$ national debt is OUR problem.

If we were all on the same page, then we could amortize that over generations.

Bet we could sell 50 year bonds!

But we’re not even on the same planet as some people.

The Tea Party and the Occupy folks were all screaming about the same thing. Crony Capitalism, Regulatory Capture, and Rule by the Effete Elite. (imho)